Trai recommends over Rs 7.5 L cr spectrum auction strategy
BRAND-NEW DELHI: Setting the phase for the rollout of 5G services, telecom regulator Trai on Monday mooted a mega auction strategy valued at over Rs 7.5 lakh crore at the base cost across multiple bands for radiowaves assigned over 30 years.
Overall, the Telecom Regulatory Authority of India (Trai) recommended about a 39 per cent decrease in the reserve or floor price for the sale of spectrum for mobile services, consisting of the current 5G offering, as it sought to match earnings expectations with the industry’s paying capability.
The watchdog has actually suggested a mega auction plan of over Rs 7.5 lakh crore for over 1 lakh megahertz spectrum in case federal government assigns it for a period of thirty years.
In case of twenty years, the total worth of the proposed spectrum auction will stand at around Rs 5.07 lakh crore at the reserve rate, according to the back-of-the-envelop computation.
With big swathes of spectrum remaining unsold in the last 2 auctions, Trai suggested to the federal government for selling airwaves in all existing bands of 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz and brand-new slots of 600 MHz, 3300-3670 MHz and 24.25-28.5 GHz.
It has actually recommended a lower reserve price for all bands, compared to last recommended rates in 2018.
When contacted, Trai chairman P D Vaghela informed PTI that 5G suggestions have been framed after a “cautious analysis” following stakeholder assessment, and wide conversations.
Suggestions are in interest of telecom sector and the country, Vaghela included.
On a 20-year scenario, the floor rate in the 700 MHz band has actually been cut by 40 percent to Rs 3,927 crore per MHz for a pan-India spectrum while the exact same in 800 MHz has been decreased by 22 percent to about Rs 3,620 crore per MHz, pan-India.
For the prime 5G frequency of 3300-3670 MHz band, the all-India reserve cost adds up to Rs 317 crore per MHz, which is more than 35 percent lower than the Rs 492 crore/MHz suggested by Trai last time around.
Trai has actually also mooted an almost 39 percent lower base price throughout all bands referred to it, as compared to the last time.
The relocation to cut the reserve cost follows more than 60 per cent of the spectrum placed on the block at the auctions in 2016 and March 2021 staying unsold.
The market has considering that then been looking for reasonable pricing in an essentially three-player market where most airwaves normally get offered at the base rate. If the rate is not in line with the market’s expectations, the spectrum could stay unsold.
Bharti Airtel chairman Sunil Mittal had actually previously spoken of “appropriate” pricing of spectrum.
Just recently, telecom market body COAI had asserted that spectrum pricing ought to be kept conducive to market conditions as 5G requires upfront capital expense with monetisation spread over a long-haul, and rates radiowaves high will only press the gamers up versus the wall.
Trai’s most current suggestions will set the foundation for spectrum auctions in 2022, to assist in the rollout of 5G mobile services within 2022-23, by private telecom providers.
The market is tailoring up for the rollout of 5G services, that will introduce ultra high speeds and generate new-age services and service designs.
“The reserve price of spectrum allowance in case of 30 years should amount to 1.5 times the reserve cost of spectrum allotment for 20 years for the particular band,” Trai said.
In the millimetre band, that is 24.25-28.5 GHz band, all India base price amounts to Rs 7 crore per MHz.
Trai further said that for the long-lasting development and sustainability of the telecom sector, infusing liquidity and motivating financial investment, the telecom provider ought to be allowed simple payment choices, consisting of part payment with versatility of moratorium.
“To supply flexibility to the telecom company, block size of 10 MHz for 3300-3670 MHz band and 50 MHz for 24.25-28.5 GHz band suggested. Spectrum to be appointed in a contiguous manner,” Trai stated in a declaration.
The sector guard dog said that thinking about the truths that presently band prepare for the frequency variety 526-612 MHz is yet to be defined by global bodies, and the advancement of the environment in the 526-612 MHz frequency variety will take a while and the ministry of info and broadcasting is utilizing the 526-582 MHz band thoroughly across the nation for TV transmitters, “the 526-612 MHz frequency variety ought to not be put to auction in the upcoming auction”.
“DoT should bring out a plan for refarming the 526-582 MHz band to be made use of for IMT deployments. To make the 526-582 MHz band available for IMT, DoT needs to work with MIB to prepare a prepare for an early migration from Analogue to Digital Transmission, so that the frequency band from the 526-582 MHz can be vacated for IMT services,” Trai stated.
Unlike existing coverage-based rollout commitments, thinking about release of 5G network in 3300-3670 MHz and 24.25-28.5 GHz bands, simple network deployment-based roll-out conditions have actually been suggested for these bands.
According to Trai, spectrum caps have actually likewise been rationalised. Overall cap throughout all bands has actually been gotten rid of.
Trai has suggested a cap of 40 percent on combined spectrum holding in sub-1 GHz bands. It has, however, advised a cap of 40 per cent on combined spectrum holding in 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands, while a specific band-specific cap of 40 percent for 3300-3670 MHz and 24.25-28.5 GHz spectrum bands has been suggested.
For ease of operating, easy and transparent spectrum surrender norms with a charge of Rs 1 lakh per spectrum band per certified service area has been recommended.
According to Trai, the spectrum for personal network can be appointed administratively to the eligible Captive Wireless Private Network Approval holders/Licensees as needed for defined geography on non-interference basis through an extensively publicized online portal-based procedure in a fair and transparent way.
Prashant Singhal, worldwide TMT emerging markets leader at EY called Trai’s suggestions on auction of 5G spectrum as a welcome relocation.
“In specific, decreasing 5G auction base price in the 3,300-3,670 MHz band by roughly 36 percent was much called for. However, even with the reduction in the base rate, 5G spectrum price in India is still greater, which is 2.6 X of Germany, 3.8 X of the UK, and 4.4 X of South Korea,” Singhal stated.
The price needs to be more pruned to offer affordable 5G services across the nation, Singhal argued.
“On the other hand, provision for surrender of spectrum is an excellent move. We require to thoroughly examine the system and the commercial plan of such surrender,” he stated.
Published at Mon, 11 Apr 2022 17:41:17 +0000